Baozun Inc. (BZUN) Announces Launch of Baotong E-logistics; Will Deepen Relationship with Alibaba's (BABA) Cainiao

August 23, 2016 7:06 AM EDT

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Baozun Inc. (Nasdaq: BZUN) announced the launch of Baotong E-logistics ("Baotong"), a wholly-owned warehousing and logistics solutions subsidiary. Baotong will further strengthen and expand the scale of the Company’s diversified range of warehousing and fulfillment services and improve its ability to serve a larger number of brand partners.

Baotong will serve as a separate logistics entity that will provide warehousing and fulfilment services to brand partners, beginning with the management and operation of Baozun’s seven distribution centers with an aggregate gross floor area of around 180,000 square meters. Final adjustments are currently being made to Baotong’s first premium warehouse, the Baotong Cube, which is expected to officially begin operations in September 2016. The new premium warehouse will be highly automated, significantly improve operational efficiency, provide brand partners with a more customizable solution and support Baozun’s long-term growth by strengthening and expanding the scale of its logistical capabilities.

Baotong will further diversify Baozun’s revenue streams by serving brand partners who are in need of the deep experience in B2C warehousing and fulfillment services. The Company will also be able to provide an enhanced and even more customizable array of logistical services to brand partners across a number of categories as well as improve their operational efficiency. Baotong will directly support the success of brand e-commerce and shape the industry going forward by forming a part of a new generation of intelligent warehousing and fulfillment services.

In addition to the strategic cooperation agreement signed with Alibaba Group Holding Limited's (NYSE: BABA) logistics arm Cainiao Network Technology Co., Ltd. ("Cainiao") last year, Baotong will further deepen its relationship with Cainiao by providing best-in-class services to a wider variety of merchants through Cainiao’s platform.

"Creating Baotong as a separate entity is a significant milestone for us in further strengthening our logistical capabilities and another step in providing enhanced warehousing and fulfillment solutions to the e-commerce market as whole,” commented Mr. Vincent Qiu, Chief Executive Officer of Baozun. "As the rapid growth of brand e-commerce continues in China, more and more brands and merchants are seeking experienced and professional B2C warehouse and fulfillment services. By establishing a logistics subsidiary, we will also be able to develop relationships with more brands, starting with logistical services. We are committed to investing in our future as we explore solutions and innovate new services in China’s e-commerce industry.”

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